Correlation Between Monster Beverage and OS Therapies
Can any of the company-specific risk be diversified away by investing in both Monster Beverage and OS Therapies at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Monster Beverage and OS Therapies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Monster Beverage Corp and OS Therapies Incorporated, you can compare the effects of market volatilities on Monster Beverage and OS Therapies and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Monster Beverage with a short position of OS Therapies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monster Beverage and OS Therapies.
Diversification Opportunities for Monster Beverage and OS Therapies
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Monster and OSTX is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Monster Beverage Corp and OS Therapies Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OS Therapies and Monster Beverage is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Monster Beverage Corp are associated (or correlated) with OS Therapies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OS Therapies has no effect on the direction of Monster Beverage i.e., Monster Beverage and OS Therapies go up and down completely randomly.
Pair Corralation between Monster Beverage and OS Therapies
Given the investment horizon of 90 days Monster Beverage Corp is expected to under-perform the OS Therapies. But the stock apears to be less risky and, when comparing its historical volatility, Monster Beverage Corp is 11.51 times less risky than OS Therapies. The stock trades about -0.26 of its potential returns per unit of risk. The OS Therapies Incorporated is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 348.00 in OS Therapies Incorporated on October 17, 2024 and sell it today you would earn a total of 88.00 from holding OS Therapies Incorporated or generate 25.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monster Beverage Corp vs. OS Therapies Incorporated
Performance |
| Timeline |
| Monster Beverage Corp |
| OS Therapies |
Monster Beverage and OS Therapies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monster Beverage and OS Therapies
The main advantage of trading using opposite Monster Beverage and OS Therapies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monster Beverage position performs unexpectedly, OS Therapies can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in OS Therapies will offset losses from the drop in OS Therapies' long position.| Monster Beverage vs. Vita Coco | Monster Beverage vs. PepsiCo | Monster Beverage vs. The Coca Cola | Monster Beverage vs. Coca Cola Femsa SAB |
| OS Therapies vs. Compania Cervecerias Unidas | OS Therapies vs. PennantPark Floating Rate | OS Therapies vs. Franklin Credit Management | OS Therapies vs. Monster Beverage Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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